The EU: IN or OUT?

BananaRepublic

Glen_Clark wrote: »

It suits business to have younger cheaper immigrant workers. But when that displaces older British workers on to benefits there is a cost to be paid

I agree. And why train a UK worker, when you can import a cheaper trained immigrant?

Linton

BananaRepublic wrote: »

.....why train a UK worker, when you can import a cheaper trained immigrant?

Excellent question. Add to that - why should a company spend a lot of money training a UK worker when once trained many will leave to get a job elsewhere? Companies that dont train have the same access to trained staff as those who do, without having to pay for it.

Over time global companies will transfer their operations to countries that have the rule of law, are secure, provide a helpful tax regime, have sufficient affordable trained staff, and have easiest access to the major markets the operation is meant to serve. Ultimately, other things being equal which they increasingly are, if the companies cant get sufficient trained workers in this country , at a price their customers are prepared to pay for, the work will move elsewhere. The expensive UK workers still wont have a job,

terry2

Ballard wrote: »

As expected, all of the noise from the EU is that we will have to accept migration in exchange for a trade agreement. It's still very early days and they may soften their stance in time but the strength of the language at this stage means that they're making it awkward to back down.

However they have to let us trade under WTO (World Trade Organisation) rules and they can't connect migration to those - the only question to be discussed is the level of the tariff - which of course would be applied reciprocally.

So as we buy more from them than they buy from us, we would collect more in duty than they would get from us. Now this would also irritate pressure groups in certain countries (eg farmers and vintners in France; car manufacturers in Germany) who would end up asking for the tariffs to be low.

We should ignore any mention of the single market and just talk about WTO and tariff levels.

BananaRepublic

Linton wrote: »

Excellent question. Add to that - why should a company spend a lot of money training a UK worker when once trained many will leave to get a job elsewhere? Companies that dont train have the same access to trained staff as those who do, without having to pay for it.

Over time global companies will transfer their operations to countries that have the rule of law, are secure, provide a helpful tax regime, have sufficient affordable trained staff, and have easiest access to the major markets the operation is meant to serve. Ultimately, other things being equal which they increasingly are, if the companies cant get sufficient trained workers in this country , at a price their customers are prepared to pay for, the work will move elsewhere. The expensive UK workers still wont have a job,

What happened in IT more than 10 years ago is that UK companies found it cheaper to hire foreign, mainly Indian, workers, on contracts from 'body shops' such as TCS than to employ UK staff. They would say to the government that there was a skills shortage. So the foreign workers acquired more skills, and many capable UK citizens left the industry, to be replaced by the foreigners. And since the foreigners now had the skills, they stopped working on the cheap, and started leaving the body shops and demanding high contract rates. Is this an ethical or desirable way to operate, to have a completely open door policy to undercut UK staff?

The truth is that UK companies CAN retain staff even after training them, but only if they pay a competitive salary and provide a pleasant working environment. I've worked in companies that keep staff for decades by doing just that. However, most companies get into the mode of treating staff as commodities, and the bean counters factor in a 2-3 years stay, and pay accordingly. In many parts of Europe, and the US, engineers are paid far more than in the UK.

bigadaj

terry2 wrote: »

However they have to let us trade under WTO (World Trade Organisation) rules and they can't connect migration to those - the only question to be discussed is the level of the tariff - which of course would be applied reciprocally.

So as we buy more from them than they buy from us, we would collect more in duty than they would get from us. Now this would also irritate pressure groups in certain countries (eg farmers and vintners in France; car manufacturers in Germany) who would end up asking for the tariffs to be low.

We should ignore any mention of the single market and just talk about WTO and tariff levels.

Depends on who the 'we' and 'us' are.

One thing the vote showed was the split in the country, primarily between London and the rest of England and Wales. The city is panicking as it makes a lot of money from the open market, even if in some instances it isn't so open, as in our invisible exports.

To me it's just another example of how the uk is too focused on financial services and needs to develop other areas better, primarily tech and high value engineering. We have expertise in these areas but not scale and there's no huge uk tech firms, the sale of arm being an example of a large firm just being sold rather than growing.

Glen_Clark

Linton wrote: »

Excellent question. Add to that - why should a company spend a lot of money training a UK worker when once trained many will leave to get a job elsewhere? Companies that dont train have the same access to trained staff as those who do, without having to pay for it.

Over time global companies will transfer their operations to countries that have the rule of law, are secure, provide a helpful tax regime, have sufficient affordable trained staff, and have easiest access to the major markets the operation is meant to serve. Ultimately, other things being equal which they increasingly are, if the companies cant get sufficient trained workers in this country , at a price their customers are prepared to pay for, the work will move elsewhere. The expensive UK workers still wont have a job,

Companies will do whats best for themselves because they are not directly responsible for the British workers displaced on to benefits by immigrants. Wheras countries like the US and Australia restrict immigrantion to those with skills they are short of, which benefits the country by reducing unemployment.
Wages in more successful countries like Germany and Austria are higher than the UK. A bigger problem for UK industry is high property prices, high cost of commuting and parking, high energy prices, high legal fees, and bad debts - like BHS whose boss is able to walk away to his third superyacht leaving suppliers and pensioners unpaid.
We need to aim for the top competing with countries like Germany, Switzerland, Austria etc on quality and innovation. Instead of aiming for the bottom competing with Bangladesh on cheapness of labour because they will beat us on that.

Linton

bigadaj wrote: »

....
To me it's just another example of how the uk is too focused on financial services and needs to develop other areas better, primarily tech and high value engineering. We have expertise in these areas but not scale and there's no huge uk tech firms, the sale of arm being an example of a large firm just being sold rather than growing.

Yes - this is key.

These days, to be successful tech and high value engineering companies must have a very large market. This market can be global or at the moment can be restricted to a large single market. The US is large enough, the EU is large enough, the UK isnt.

To compete, these high value companies must be able to attract skills from among the best in the world with minimal hassle. Those countries which allow unrestricted entry to people with such skills will have massive advantages over those that dont.

bigadaj

Linton wrote: »

Yes - this is key.

These days, to be successful tech and high value engineering companies must have a very large market. This market can be global or at the moment can be restricted to a large single market. The US is large enough, the EU is large enough, the UK isnt.

To compete, these high value companies must be able to attract skills from among the best in the world with minimal hassle. Those countries which allow unrestricted entry to people with such skills will have massive advantages over those that dont.

....so why hasn't this worked under the current circumstances?

talexuser

bigadaj wrote: »

....so why hasn't this worked under the current circumstances?

because skilled engineers in other (high value) countries have better status, career path and standard of living than here?

In Germany there's hardly a manufacturing industry without diploma engineers on the board, here I would say more a rarity.

Linton

bigadaj wrote: »

....so why hasn't this worked under the current circumstances?

Globalisation as a major factor is relatively recent as is free movement of labour within the EU. Free movement of labout improves the efficiency of globalisation. The effects will take some time to work through. When they do, those companies, or operations within companies, with easy access to a global pool of labour will have a significant advantage over those that dont. The effect is that business will move to countries that provide it.

Labour mobility has worked in some areas - agriculture, finance and the high tech companies around our universities for example. The latter acould be our best hope for the future and if they are to grow need access to a larger pool of specialist staff than can be supplied from the UK.

Looking back at history gives us some lessons. The industrial revolution could only happen if sufficient labour was able to move where the work was within the UK. This resulted in large movements of wealth within the UK. I believe we are now seeing the start of the same process on a global scale.